On the daily chart, a Dark Cloud Cover pattern is observed, indicating a potential bearish reversal," Rupak De, senior technical analyst at LKP Securities said.
He feels immediate support is situated at 22,300, below which the Nifty could extend its losses towards 22,000.
On the other hand, the level of 22,500 might act as a technical resistance for the Nifty."
On the weekly options front, the maximum Call open interest was seen at 22,500 strike, followed by 23,500, 23,000 and 22,600 strikes, with meaningful Call writing at 23,000 strike, then 22,500 and 23,200 strikes, while on the Put side, 21,500 strike owned the maximum open interest, followed by 22,500 strike, 22,000 strike, with meaningful Call writing at 21,800 strike, then 22,200 strike.
The options data indicated that the Nifty 50 may take support at 22,200 and 22,000 levels, with resistance at 22,500 and 22,600 levels.
Nifty Downtrend
The Nifty 50 started off May series on a negative note as it closed lower for the first time in last six consecutive sessions on April 26, due to selling pressure and formed Dark Cloud Cover kind of candlestick pattern on the daily charts, the bearish reversal pattern. Hence, 22,300, the low of previous day's long bull candle, can act as an immediate support for the index, followed by crucial one at 22,000, but in case of rebound, the 22,500-22,600 is the area to watch as surpassing the same can take the index towards 22,800 level, experts said.
The Nifty 50 opened above 22,600, but lost those opening gains within an initial hour itself and traded lower for rest of the day. The index ended at 22,420, down 150 points, while for the week, it was up 1.23 percent and formed High Wave kind of candlestick pattern (not exactly one) on the weekly charts.
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"The index failed to sustain above the crucial level of 22,500. On the daily chart, a Dark Cloud Cover pattern is observed, indicating a potential bearish reversal," Rupak De, senior technical analyst at LKP Securities said.
He feels immediate support is situated at 22,300, below which the Nifty could extend its losses towards 22,000. On the other hand, the level of 22,500 might act as a technical resistance for the Nifty."
On the weekly options front, the maximum Call open interest was seen at 22,500 strike, followed by 23,500, 23,000 and 22,600 strikes, with meaningful Call writing at 23,000 strike, then 22,500 and 23,200 strikes, while on the Put side, 21,500 strike owned the maximum open interest, followed by 22,500 strike, 22,000 strike, with meaningful Call writing at 21,800 strike, then 22,200 strike.
The options data indicated that the Nifty 50 may take support at 22,200 and 22,000 levels, with resistance at 22,500 and 22,600 levels.
Bank Nifty
The Bank Nifty also snapped five-day winning streak, declining 294 points to 48,201 and formed bearish candlestick pattern on the daily charts, while on the weekly scale, the index gained 1.32 percent and formed High Wave kind of candlestick pattern, indicating indecisiveness among bulls and bears about future market trend. Hence, some kind of consolidation can't be ruled in coming days, experts feel.
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"There was a lack of follow-up buying interest. The divergence on the momentum indicator also did not support the upmove. This could lead to some consolidation in the near term. On the downside, 47,500 is the crucial level to watch out for," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
According to Amol Athawale, VP-technical research at Kotak Securities, the 20-day SMA or 48,000 could act as a sacrosanct level. "Below the same, the sentiment could change. Below which, it could retest the level of 47,500 -47,250 or 50-day SMA," he said.
The volatility extended uptrend for third consecutive session, but still way below crucial 12-13 levels, hence there won't be a big concern for bulls yet. India VIX, the fear index, rose by 1.82 percent to 10.93, from 10.73 levels.
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